Source: Wood agrees to return to Cubs

The free-agent right-hander has agreed to a one-year, $1.5 million deal with the Chicago Cubs, the team that gave him his professional start, according to a major-league source. The two sides are still working out incentives.

Wood will be used as a set-up man for closer Carlos Marmol, enabling them to move right-hander Andrew Cashner to the starting rotation. However, as part of the incentives, Wood will receive more money should he become closer. He will also receive appearance-based incentives.

According to the source, Wood, 33, agreed to far less money than the two-year, $12 million contract that a rival GM said he was seeking because of his desire to return to the Cubs. He pitched for the Cubs from 1998-2008 before signing a two-year, free-agent contract with the Cleveland Indians, who traded him to the New York Yankees last July.

He never lost his affection for Chicago, and Cubs general manager Jim Hendry never lost his affection for Wood. Hendry often has said he has never been closer to a player in his 15 years with the organization.

The Cubs selected Wood with the fourth overall pick of the 1995 draft. That same year, Hendry joined the club as farm director.

Wood pitched brilliantly for the Yankees in the final two months last season, producing a 0.69 ERA in 26 innings.

The news that he was in serious discussions with the Cubs first was reported by Dave Kaplan of Chicago Now.